Monday, September 08, 2008
WH Smith eyeing bid for Borders UK arm - story from The Scotsman
HIGH Street retail chain WH Smith is considering a bid to buy the British arm of troubled bookseller Borders, it has emerged.
A shortlist of bidders, compiled by investment bank Merrill Lynch, is understood to include WH Smith alongside a number of private equity firms.
Any deal for the struggling company, which owns more than 70 outlets and employs 2000 people, is likely to top Â£50 million and would give the successful bidder a seven per cent share of the UK books market.
But sources close to WH Smith are concerned that there would be significant hurdles to overcome, including competition issues. It is also thought that private equity firms may have a number of advantages over the retailer. Borders announced in March that it would be pulling out of the UK to focus on improving its business in the United States.
The firm is currently the second largest bookseller in the US, although bosses said the business has been under performing in recent years. A move by WH Smith would face competition issues and is likely to attract objections from the industry and rivals, who lobbied heavily to have the merger of Waterstone's and Ottakar's referred to the Competition.